Is there a tried and tested formula when it comes to getting a pay rise? Surely hard work equals more money, right? Well, not necessarily. In fact, several factors affect your chances of getting a pay rise that extends way beyond your control. This month, the BBC reported six key contributors that influence whether you’ll get a pay rise, as well as some of the things you can do to improve your chances. Let’s take a look...
1. What Year Were You Born?
Up to this point, every generation has tended to earn more than the one before it. According to the report, those born in the early 1970s earned about 16 per cent more at the age of 28 than those born in the late 1950s. However, those born in the late 1980s earned less at 28 than the generation born 10 years earlier. This is due to their careers began in the middle of an unprecedented pay slump, following the 2008 recession.
University often leads to faster pay growth for the rest of your 20s. Graduates born in 1980 saw their average pay rise by 8 per cent a year between the ages of 22 and 30. That’s compared with 6 per cent per year for those whose highest qualification is A-levels, or 3 per cent for those with an equivalent vocational qualification.
2. Being At The Bottom (Or At The Top)
The BBC reports that over the last 20 years, the lowest-paid fifth of workers have seen their real pay grow by 40 per cent - twice as fast as middle earners. This is mainly due to the 1999 introduction of the National Minimum Wage, which has risen steadily. It currently stands at £8.21 for people aged 25 and over, making it one of the highest minimum wages in the world.
Those workers at the top have done well too, with the average pay for the top 5 per cent of earners growing twice as fast as middle-ranking workers over the last 20 years.
3. Being A Man
While significant progress has been made to close the gender pay gap 50 years on from the Equal Pay Act, men are still paid 18 per cent more per hour than women across full and part-time work combined. The gap is smaller among younger workers but grows to 11 per cent by the time people hit their 30s. The article reports that the gap continues to rise as the “motherhood penalty” kicks in, with many mothers opting for part-time hours, which tends to pay less per hour than full-time work. In 2018, more than half of working women with dependent children were part-time, compared to one in 10 men.
And the gender pay gap continues to grow when employees reach their 50s when women are still more likely to work part-time, with a quarter of older female workers providing unpaid care for their parents or grandchildren, compared with an eighth of male workers.
Those were some outside factors that you can’t do much about, so let’s take a look at the aspects you can control…
4. Being More Productive
It’s an obvious one, but productivity is the primary driver in influencing our pay. Britain’s productivity was growing at around 2 per cent a year before the recession but is in the same place now that it was a decade ago. While boosting productivity and wages is mainly in the hands of employers and the government through things like technology and training, workers are still in control of their output and the effect this can have on a company’s bottom line.
5. Changing Jobs
If you’re not getting anywhere negotiating a pay rise with your current employer, you could start looking to work elsewhere. BBC’s article states that in 2018, workers who stuck with the same firm saw their average pay rise by 0.6 per cent a year, after inflation. Compare this with the typical pay rise in the year after changing employer being more than seven times higher at 4.5 per cent.
6. A Complete Change Of Scenery
If you’re looking for a significant pay rise, you might want to consider moving house as well as jobs. In 2016, the typical pay rise associated with changing both jobs and region was 9 per cent. Despite this, young people, in particular, are moving jobs less frequently than they used to, due to fewer employment blackspots across the UK meaning there’s less of a need to relocate to find work. Additionally, bigger pay rises associated with moving are often swallowed up by higher housing costs. For example, rents have grown by more than 90 per cent in the highest-paying local authorities over the past 20 years, compared with 70 per cent in the lowest paying. This has meant that young private renters are 60 per cent less likely to move home and job than they were in 1997.
Time For A Change?
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